UAE Corporate tax: Current Guide for Businesses

UAE Corporate tax is an active compliance regime

Federal Corporate tax applies to tax periods beginning on or after 1 June 2023. A business should use the enacted law, current Cabinet and Ministerial Decisions, and Federal Tax Authority guidance rather than consultation-stage summaries published before implementation.

Who is within scope?

UAE juridical persons, Free Zone Persons and certain foreign or natural persons can be within scope, subject to the residence, permanent-establishment, nexus, business-activity and exemption rules. Registration and filing obligations should be assessed separately from whether tax is ultimately payable.

Corporate tax rates

The general regime applies 0% to taxable income up to AED 375,000 and 9% above that amount. Special outcomes can apply to Exempt Persons, Qualifying Free Zone Persons and members of multinational groups within the UAE Domestic Minimum Top-up Tax framework. A rate should never be applied before the taxpayer and taxable income have been determined.

From accounting profit to taxable income

The calculation generally begins with accounting income prepared under the accepted financial-reporting framework. Adjustments may be required for exempt income, non-deductible expenditure, related-party pricing, interest limitations, unrealised gains or losses, reliefs, tax losses, transitional rules and elections. Each adjustment should reconcile to the ledger and supporting evidence.

Core compliance cycle

1. Confirm the taxable person, licences, branches, financial year and first tax period.
2. Complete registration and verify the EmaraTax profile.
3. Close the accounts and prepare a documented tax computation.
4. Review Free Zone, transfer pricing, elections, reliefs and disclosure schedules.
5. File the Corporate tax Return and pay any amount due within the applicable deadline.
6. Retain the return, computation, financial records, decisions and submission evidence.

Free Zone businesses

A Free Zone Person is not outside Corporate tax. It must assess registration and return obligations, and a Qualifying Free Zone Person receives 0% only on Qualifying Income when every statutory condition is met. Substance, audited financial statements, transfer pricing, qualifying activities, excluded activities and the de minimis test should be reviewed together.

Transfer pricing and connected persons

Domestic and cross-border transactions with Related Parties and Connected Persons must follow the arm’s-length principle. Agreements, functional analysis, pricing support, benchmarking and return disclosures should agree with the financial statements and tax computation.

How SAIF Chartered Accountants can help

SAIF Chartered Accountants supports UAE businesses with registration, impact assessment, accounting review, Free Zone analysis, transfer pricing, tax computations, return preparation and audit alignment.